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Azul Posts Increase in November Traffic and Load Factor


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Azul S.A. AZUL delivered impressive traffic figures for November 2018. Consolidated traffic (measured in revenue passenger kilometers or RPKs) improved 14.4% to 1.9 billion on the back of 19.8% rise on the international front and 12.9% growth on the domestic front.

On a year-over-year basis, consolidated capacity (or available seat kilometers/ASKs) expanded 12.4% to 2.2 billion, owing to 18.7% growth in international capacity and 10.8% rise in domestic capacity.

Consolidated load factor (percentage of seats filled by passengers) inched up 1.5 percentage points (pp) to 83.6%, courtesy of traffic growth outpacing capacity expansion. Domestically, load factor increased to 82.5% from 80.9% in the year-ago period. Load factor on the international front expanded to 87.7% from 86.9% in the prior-year period.

At the end of the first 11 months of 2018, RPK was up 16.7% and ASK grew 16.3%. Also, load factor inched up 0.3 pp to 82.2% on a year-over-year basis.

AZUL SA Price

AZUL SA Price | AZUL SA Quote

In spite of reporting impressive traffic figures, Azul has its own share of challenges. Despite the current downtrend in oil prices , the bottom line continues to be hurt due to costs related to aircraft fuel. Depreciation in the Brazilian currency is also a major headwind. For 2018, Azul projects an increase in costs of R$800 million and R$900 million for currency fluctuation and fuel price, respectively. In fact, these concerns have compelled the company to trim guidance for current-year operating margin. Operating margin is anticipated to be 9% compared with the previous guidance of 9-11%.

Zacks Rank & Stocks to Consider

Azul carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the Zacks Transportation sector are Spirit Airlines, Inc. SAVE , Hertz Global Holdings, Inc. HTZ and Air France-KLM SA AFLYY . While Hertz Global carries a Zacks Rank #2 (Buy), Spirit Airlines and Air France sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Shares of Hertz Global, Spirit Airlines and Air France have gained 10.3%, 74.3% and 29.6% in the past six months, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: AFLYY , SAVE , HTZ , AZUL



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